Options Basics

Outline:

I. Introduction
  A. Description of the community led by John
  B. Overview of the weekly online meetings and their purpose

II. Importance of Proper Options Trading
  A. Common mistake of picking the wrong strike, strategy, and expiration
  B. Emphasis on analyzing the markets and understanding the circumstances
  C. Tailoring strategies to individual situations

III. Trend Identification in the Market
  A. Discussion of the current trend in the QQQs (NASDAQ)
  B. Recognition of an early stage downtrend, but overall long-term uptrend
  C. Advice to remain bullish and not aggressively short the market

IV. Basket Trading Mentality
  A. Explanation of the concept of basket trading
  B. Benefits of diversifying trades with both long and short ideas
  C. Importance of top-down analysis and trading different stocks

V. Adding Bearish Exposure
  A. Suggestion to start adding bearish exposure in the current market
  B. Acknowledgment of technical damage but not a broken uptrend
  C. Explanation of when an uptrend is considered broken

VI. Importance of Education and Coaching
  A. Benefits of learning the right way to trade options
  B. Potential for growing a small account and achieving financial goals
  C. Offer of education resources and coaching services from Top Trading Pros

VII. Conclusion
  A. Encouragement to explore free content and resources on the website
  B. Reminder to approach options trading seriously and gradually
  C. Warnings about upcoming economic data and the need to manage risk effectively 

Summary 

John discusses the importance of proper options trading and emphasizes the need for education and coaching. They introduce the concept of basket trading, which involves diversifying trades with both long and short ideas. John advises caution in the current market but suggests adding bearish exposure. They highlight the importance of trend identification and offer resources for individuals interested in learning options trading. John encourages viewers to approach trading gradually and manage risk effectively. 

Hello, everybody. This is John Napolitano here with you from Top Trading Pros. I hope everybody’s having a fantastic week so far trading. I know we’ve had a few bumps along the road the last couple of days. The NASDAQ particularly has been jumping around all over the place. I am the options trading instructor for Top Trading Pros.

I’ve been doing this options trading for well over 20 years. For some of you who don’t know me, I just wanted to introduce myself. I’m a former institutional trader. I currently trade my own capital as well as coach others. So a top trading pro is one of the things that we emphasize specifically is coaching.

It’s very easy to get options education these days. You could obviously go on YouTube, which you’re probably doing right now. You could read books. There’s lots of material out there. Some good, some not so good, unfortunately. But what we have that’s unique in our community is coaching. What we do is we have a community of like minded people led by myself who does who does the options coaching and teaching.

And we have weekly meetings that are online that we talk and discuss ideas and share insights. And I give advice. I don’t give necessarily trade ideas. We do discuss names and stuff like that. But one of the primary things we do is we discuss roadblocks that maybe impede your trading, whether it be psychological, whether it be lack of a good trading plan, whether it be lack of the proper option strategies.

So a lot of people come to me and ask me how do you trade options? And the answer to that is it’s really not that difficult. The most important thing that I find people make the largest mistake on is that they pick the wrong strike and the wrong strategy and the wrong expiration. So we spend a lot of time with our students going over what the proper strategy is, giving, given the circumstance that you’re dealing with.

So not, it’s not a one size fits all answer. You have to really analyze the markets and understand what you’re doing and why you’re doing it. What I’m going to talk about today in this video is what we’ve encountered recently. And I’m going to jump into this right now because it’s a pretty important topic.

When, basically we talked last night on our coaching call about trend identification and a lot of people are looking at the QQQs right now, which is what you see right in front of you. It’s basically the NASDAQ. And what you see here is an early stage downtrend. As you can see, we broke the 20 day moving average and we bounced off the 50, at least for now.

So we keep things fairly simple in our community. We don’t get into all these crazy oscillators, indicators, and algorithms. I’ve been doing this for a really long time and I find that simple is always best. If you have a simple solution to something and it works, that is what you need to stick with and you need to work on your consistency.

So we have an early stage downtrend, but when I, what I talked about in our coaching call was you’ve had basically an uptrend since the beginning of the year. As you can see right here, I’m going to move my, I’m going to actually move my face over just for one second. So you could see what I’m talking about here.

Bear with me one second. I want you to see the beginning of this chart. There you go. So basically here, ever since the beginning of the year we’ve had this uptrend and now you have a little bit of a bump in the road. It’s actually healthy. If you look at it, the longterm trend is still up.

So what I’m telling my students is, listen, you need to be bullish. Still. The market is still up 30% on the year. Things are looking better. Inflation’s under control. And no matter how you feel about what’s going on. Politics or government or geopolitical or whatever. We have ourselves an uptrend period, end of story.

And now we did have a pullback. So does that mean you aggressively start shorting the market? Probably not, especially since you’ve bounced off the 50 day moving average. What you have to do when your options trading, and this is what I tell my students, is this, you have to have a basket trading mentality.

And this is what I teach my students. And this is what you’ll learn. If you spend some time with me, you don’t just put all your eggs in one basket. You don’t just trade one or two things. One of the great things about options trading is you’re able with a very small account to put together a portfolio of both long ideas and short ideas, bullish trades and bearish trades at the same time, based on top down analysis, which is another thing that we teach you guys where you’re looking at the market sector and then you go down to individual stocks, you will not be trading the same boring old stocks every single week.

You’re going to be trading things that you’ve probably never even heard of. And that is the way to trade and avoid bias also. So these are all things we teach our students over time. But when you look at a chart like this, what I tell my students is you have to start adding bearish exposure. Up until last week, I’ve been very bullish.

I’ve been saying, the market’s about an AA plus if you’re going to give it a grade. Right now it is not an AA plus. When you start breaking those moving averages, you do have a little bit of technical damage. But just because you have a little bit of damage does not mean your uptrend is broken.

So when is an uptrend broken? That is usually when it takes out the controlling swing low, which we will learn all about in our classes. So here’s the thing. If you are interested in learning how to trade the right way, if you’re interested in, learning really from scratch, how to put together a trade plan that works for you and your personality, if you’re interested with a small account size to grow it over time, If you want to quit your job and trade full time, if you want to, if you love your job, but want to have a supplemental income options, trading resolves and solves all those problems over time.

The key is you have to have the right education. And the key is you have to have the right coaching. That is what we offer at top trading pros. So check out our videos. And subscribe to this channel. We’ll talk about all kinds of option strategies. If you look through my videos, we cover a whole bunch of topics for free.

So you get some free content under your belt and get comfortable with our strategy. Check out our website, top trading pros. com. We have plenty of free content and commentary on there every single week. If you want to take things to the next level, we have eBooks and video education that you can purchase and get your feet wet.

And then you can move on to coaching. If you’re serious, if you’re serious about coaching. that will require us to sit down and have an interview with you. Because we don’t take every single student. What we want is the right community, not necessarily just the get rich quick crowd, because that is not our style, okay?

So if you’re serious about this please, go on this path slowly and gradually, and I hope you go on it with us, because we have an incredible product. We have a brand new website that we just launched, so check us out, okay? Hope you guys have a wonderful day. Be careful out there. We have CPI tomorrow and a bunch of economic data.

So again, be cautious, be balanced and always manage your risk. Okay. Take care everybody. Bye bye.

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